Commissioner of Income Tax, Ujjain vs Dawoodi Bohara Jamat

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2014 Supreme(SC) 1052

SUPREME COURT OF INDIA
H.L. DATTU & A.K. SIKRI, JJ.
Commissioner of Income Tax, Ujjain – Appellant
Vs.
Dawoodi Bohara Jamat – Respondent
C.A. Nos. 2492, 2493, 2494, 2495, 2496, 2497, 2498, 2499, 2500, 2501, 2502, 2503, 2504, 2505, 2506, 2507, 2508, 2509, 2510, 2511, 2512, 2513, 2514, 2515, 2516, 2517, 2518, 2519, 2520, 2521, 2522, 2523, 2524, 2525, 2526, 2527, 2528, 2529, 2530, 2531, 2532, 2533, 2534, 2535, 2536, 2537, 2538, 2539, 2540, 2541, 2542, 2543, 2544, 2545, 2546, 2547, 2548, 2549, 2550, 2551, 2552, 2553, 2554, 2555, 2556, 2557, 2558, 2559, 2560, 2561, 2562, 2563, 2564, 2565, 2566, 2567, 2568, 2569, 2570, 2571 of 2014 & Arising Out of SLP(C) Nos. 9004, 9039, 9040, 9042, 9043, 9045, 9046, 9048, 9049, 9051, 9052, 9053, 9055, 9056, 9065, 9066, 10386, 10387, 10388, 10389, 10391, 10393, 10394, 10395, 10397, 10398, 10399, 11794, 11815, 11817, 11819, 11821, 14859, 14861, 14863, 14864, 17863, 18501, 18502, 18503, 25131, 25550, 29327, 30008, 32054, 32055, 32058, 33074, 34048, 34543, 34550, 34645, 35124 of 2010 & Arising Out of SLP(C) Nos. 59, 229, 230, 240, 366, 375, 2021, 2035, 2065, 2419, 2434, 2420, 2608, 3079, 4769, 8943, 10279, 10955, 11566, 11615, 17035, 24656, 24657, 24997, 25990, 26559, 27678 of 2011
Decided On : 20.2.2014

Headnote:
Income Tax Act, 1961 - Section 260A – Claim of compensation – Whether a fact has been proved when evidence for and against has been properly admitted - Commissioner after affording an opportunity of hearing to applicants had come to conclusion that Respondent is a charitable trust and since object and purpose of trust is confined only to a particular religious community same would attract provisions of Section 13(1)(b) of Act and therefore declined prayer made for registration of trust by his order Aggrieved by order so passed Respondent had carried the matter by way of an appeal before Tribunal - Tribunal after going through the objects of the Respondent-trust has come to the conclusion that Respondent is a public religious trust as objects of trust are wholly religious in nature and thus provisions of Section – Held, Deed of Trust and rules run into more than thirty pages out of which six pages of Trust Deed narrate philosophy of Jain Dharma - Objects of Trust clearly show that Trust is meant for propagation of Jain religion and rendering help to followers of Jain religion - Even medical aid and similar facilities are to be rendered to persons devoted to Jain religion and to non-Janis if suffering from ailments but medical aid could be given to them only if any member of families managing Trust shows sympathy and is interested in their treatment – Tribunal in our opinion was right in its conclusion that dominant purpose of Trust in the present case was propagation of Jain religion and to serve its followers and any part of agricultural income of Trust spent in State of Kerala also could not be treated as allowable item of expenses - In present case objects of Respondent-trust are based on religious tenets under Quran according to religious faith of Islam - Court have already noticed that perusal of objects and purposes of Respondent-trust would clearly demonstrate that activities of trust though both charitable and religious are not exclusively meant for a particular religious community – Objects as explained in the preceding paragraphs do not channel benefits to any community if not Dagwood Bora Community and thus would not fall under provisions of Section 13(1)(b) of Ac - In that view of matter Court are of considered opinion that Respondent-trust is a charitable and religious trust which does not benefit any specific religious community and therefore it cannot be held that Section 13(1)(b) of Act would be attracted to the Respondent-trust and thereby it would be eligible to claim exemption under Section 11 of the Act - In result appeals are dismissed with no order as to costs – Appeal dismissed

JUDGMENT :

1. Leave granted. These appeals arise out of the common judgment and order passed by the High Court of Madhya Pradesh at Indore in Income Tax Appeal No. 112 of 2008 and other appeals dated 22.6.2009. By the impugned judgment and order, the High Court has concluded, firstly, that since the Income Tax Appellate Tribunal (for short the Tribunal) has recorded a finding of fact that the Respondent herein is a public religious trust, in exercise of its powers under Section 260A of the Income Tax Act, 1961 (for short the Act) it would not be interfering with such a finding of fact and secondly, that the Respondent being a public religious trust, the provisions of Section 13(1)(b) would not be applicable to it and therefore, dismissed the appeal filed by the Revenue confirming the orders passed by the Tribunal, dated 28.3.2008.

2. Propter commoditatem, we would refer to the conspectus of facts in the lead case for the disposal of the instant batch of appeals. The Respondent is a registered Public Trust under the M.P. Public Trusts Act, 1951. The Respondent had filed an application for registration before the Commissioner of Income Tax (for short the Commissioner) as envisaged under Section 12A read with Section 12AA of the Act for availing the exemption under Section 11 of the Act. The Commissioner, after affording an opportunity of hearing to the applicants, had come to the conclusion that the Respondent is a charitable trust and since the object and purpose of the trust is confined only to a particular religious community the same would attract the provisions of Section 13(1)(b) of the Act and therefore, declined the prayer made for registration of the trust by his order dated 14.9.2007.

3. Aggrieved by the order so passed, the Respondent had carried the matter by way of an appeal before the Tribunal. The Tribunal after going through the objects of the Respondent-trust has come to the conclusion that the Respondent is a public religious trust as the objects of the trust are wholly religious in nature and thus, the provisions of Section 13(1)(b) which are otherwise applicable in case of charitable trust would not be applicable and therefore, held that the Respondent-trust is entitled to claim registration under Sections 12A and 12AA and accordingly, allowed the appeal and set aside the order passed by the Commissioner and further directed the Commissioner of Income Tax to grant registration under Section 12A read with Section 12AA of the Act to all the applicant-trusts.

4. Aggrieved by the aforesaid decision passed by the Tribunal, the Revenue approached the High Court under Section 260A of the Act. The court primarily, is of the view that the decision of the Tribunal is rendered purely on the factual matrix of the case and therefore, it would be improper to disturb the finding of fact so arrived by the Tribunal. Secondly, the court has observed that the provisions of Section 13(1)(b) would not be applicable to the Respondent-trust as the trust is not created or established for the benefit of any particular religious community or caste. Consequently the court has dismissed the appeal filed by the Revenue by judgment and order dated 22.6.2009.

5. Disturbed by the aforesaid, the Revenue is before us in these appeals.

6. We have heard the parties to the lis and carefully perused the judgment and order passed by the court. We have also looked into the objects and purposes of the trust which was the subject matter before the Commissioner as well as the Tribunal.

7. The lis herein relates to the entitlement of the Respondent-trust for registration under the provisions of Section 12A read with Section 12AA of the Act for claiming the benefit of exemption under Section 11 and 12 read with Section 13 of the Act.

8. The Revenue would submit, that, the objects of the Respondent-trust are not wholly religious in nature but are charitable and confined to the benefit of a particular religious community the Dawoodi Bohra community and thus, the

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2014 Supreme(SC) 1052

Cases Referred (10)